Luxury, Sure, But Buyers Try For Low Key

The rich are back, spending as much or more than ever on New York real estate, though a bit more discreetly than in the past.

ENLARGE

150 Charles St. in the West Village launched sales last month
Hayes Davidson

That is the finding of a new report on the strong luxury real-estate market last year, amid signs that the pace of high-end deal making is picking up further in 2013.

The report, by Stribling & Associates, found that co-op and townhouse sales of $5 million or more hit a record in 2012, exceeding totals in 2008, the peak year for Manhattan before the financial crisis stalled sales.

Condominium sales closed in 2012 lagged behind their totals in earlier years, but brokers said that may be due in part to a rush of contracts signed for new luxury condos in buildings that are still under construction.

"While there is no law of nature requiring that what comes down must go back up, the luxury residential $5 million plus market in Manhattan certainly has done just that," said Kirk Henckels, director of Stribling Private Brokerage who prepared the report.

Mr. Henckels said that after the demise of Lehman Brothers Holdings in the fall of 2008, wealthy buyers operated on the basis of fear and only bought when they came across a bargain.

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Now, citing market research, he said the wealthy still want to keep a lower profile, but are willing to spend more on homes and other luxuries that provide value and quality and improve "their personal and family lives, even at full asking price."

This translated into top prices in 2012 for Manhattan co-ops and condos, a shift that some brokers see as a reaffirmation of New York.

Wealthy people who had been buying big places outside New York—in Florida or the Hamptons, for example—are now deciding to stay in New York "and be comfortable and have a big home," said Dolly Lenz, a luxury broker at Douglas Elliman.

Some wealthy international buyers interested in American real estate are looking for something more than value, said Pamela Liebman, president of Corcoran Group.

"Many of them are not just looking at this as a place to dump their cash," she said. "They want a place they can use and enjoy when they come to New York, many of them have family here."

The highest closed sale of 2012 was the $88 million sale of a condo penthouse at 15 Central Park West, on the corner of West 62nd Street. It was sold by Sanford Weill, the former chairman of Citigroup, to the family of a Russian billionaire.

But during 2012, Extell Development reported that two buyers had signed contracts for even higher prices: at least $90 million for full-floor duplex penthouses near the top of the 1,004-foot-high One57, a new condominium under construction on West 57th Street across from Carnegie Hall.

The record high for a co-op was set in November by David Geffen, the music executive. when he paid $54 million to Denise Rich, the socialite for a penthouse at 785 Fifth Ave. near East 60th Street. The top townhouse sale of the year was the $42 million sale of a mansion at 973 Fifth Ave. designed by Stanford White.

ENLARGE

Last week, a fourth-floor co-op owned by Adam Clayton, the U2 bass player, was sold for about $8.85 million—about $150,000 over the asking price—at the Eldorado on Central Park West and West 90th Street showing the strength of the market. The buyer was identified by brokers as Bruce Willis; the apartment has seven windows facing Central Park.

Emma Kerins, a broker at Halstead Property who had the listing, said there were several bidders for the Clayton apartment. She said prices were being pushed higher because of a shortage of "good apartments, in very solid buildings with direct park views."

One new element in the market is the strong sales in developments still under construction that are targeted at very wealthy buyers. These deals—about $2.5 billion or more in these luxury apartments may now be in contract, according to reports from developers—but may not close for many months or years.

Last month, two new downtown buildings officially launched sales, and quickly reported very strong results. At 150 Charles St. in the West Village, a condo that combines a converted warehouse with two new 16-story wings, reported 60 of its 91 apartments in contract, with a total value of more than $500 million.

Leonard Steinberg, a broker at Douglas Elliman who is overseeing sales there, said the signed contracts now include a $34 million penthouse.

He attributed the strong sales to the "low-key luxury" favored by the wealthy today. "Crystal chandeliers and marble lobbies are not what buyers are looking for today," he said. "They want rich, warm character."

Farther downtown in TriBeCa, the developer of a 57-story tower of stacked boxes known as 56 Leonard St., announced that buyers had signed contracts for more than half the 145 condos since it officially launched sales last month. Contracts totaled more than $450 million, according to Alexico Group.

"I've never witnessed so much pent up demand," said Kelly Mack, president of Corcoran Sunshine Marketing Group, which is handling marketing and sales for the building.

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